Hind Agro Oils Ltd., New Delhi v. ITO, New Delhi

ITA 5330/DEL/2011 | 2006-2007
Pronouncement Date: 22-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 533020114 RSA 2011
Assessee PAN AAACH2979Q
Bench Delhi
Appeal Number ITA 5330/DEL/2011
Duration Of Justice 2 month(s) 23 day(s)
Appellant Hind Agro Oils Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 22-02-2012
Date Of Final Hearing 31-01-2012
Next Hearing Date 31-01-2012
Assessment Year 2006-2007
Appeal Filed On 29-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH C BENCH C BENCH C BENCH C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D.AGRAWAL BEFORE SHRI G.D.AGRAWAL BEFORE SHRI G.D.AGRAWAL BEFORE SHRI G.D.AGRAWAL VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI A.D.JAIN JUDICIAL MEMBER SHRI A.D.JAIN JUDICIAL MEMBER SHRI A.D.JAIN JUDICIAL MEMBER SHRI A.D.JAIN JUDICIAL MEMBER ITA NO.5330/DEL/2011 ITA NO.5330/DEL/2011 ITA NO.5330/DEL/2011 ITA NO.5330/DEL/2011 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006- -- -07 0707 07 M/S HIND AGRO OILS LTD. M/S HIND AGRO OILS LTD. M/S HIND AGRO OILS LTD. M/S HIND AGRO OILS LTD. G GG G- -- -60 2 60 2 60 2 60 2 ND NDND ND FLOOR FLOOR FLOOR FLOOR ARUNA PARK SAKARPUR ARUNA PARK SAKARPUR ARUNA PARK SAKARPUR ARUNA PARK SAKARPUR DELHI DELHI DELHI DELHI 110 091. 110 091. 110 091. 110 091. PAN : AAACH2979Q. PAN : AAACH2979Q. PAN : AAACH2979Q. PAN : AAACH2979Q. VS. VS. VS. VS. INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -12(4) 12(4) 12(4) 12(4) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI O.P.MODY ADVOCATE. RESPONDENT BY : SHRI R.S.GILL CIT-DR. ORDER ORDER ORDER ORDER PER A.D.JAIN JM : PER A.D.JAIN JM : PER A.D.JAIN JM : PER A.D.JAIN JM : THIS IS ASSESSEES APPEAL FOR AY 2006-07 AGAINST TH E ORDER DATED 3 RD OCTOBER 2011 PASSED BY LEARNED CIT(A)-XXVIII NEW DELHI CONFIRMING THE ADDITION OF ` 2 05 50 796/- AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT 1961. 2. THE ASSESSEE IS IN THE BUSINESS OF SALE AND PURC HASE OF SHARES AND ADVANCING INTEREST FREE LOANS TO VARIOUS PARTIE S. DURING THE YEAR THERE WERE UNSECURED ADVANCES OF ` 3 25 61 000/-. THE SHARE CAPITAL WAS OF ` 2 00 00 000/-. THE ASSESSING OFFICER ASKED THE ASS ESSEE TO FURNISH CONFIRMATIONS FROM THE LOAN CREDITORS AND D ETAILS INCLUDING BANK ACCOUNTS THEIR ITRS IDENTIFICATION CREDITWORTHIN ESS AND GENUINENESS OF THE TRANSACTIONS. BESIDES THE ASSESSEE WAS ASK ED TO FURNISH COPIES OF DEMAT ACCOUNT SCRIP-WISE DETAILS OF SALE AND PU RCHASE OF SHARES COMPLETE DETAILS OF THE PARTIES TO WHOM LOANS AND A DVANCES HAD BEEN GIVEN AND EVIDENCES FOR INVESTMENT IN SHARES OF VAR IOUS COMPANIES. AS PER THE ASSESSMENT ORDER THE ASSESSEE FURNISHED A FEW DETAILS IN RESPECT OF INVESTMENT OF ` 1 34 05 000/- ALONGWITH CONFIRMATIONS OF THE ITA-5330/DEL/2011 2 COMPANIES WITH REGARD TO INVESTMENT MADE BY THE COM PANY FOR PURCHASE OF SHARES. THE ASSESSING OFFICER OBSERVED THAT THE CONFIRMATIONS FILED DID NOT GIVE THE VALUE OF INVES TMENT MADE IN PURCHASE OF THE SHARES; THAT THE COPY OF THE ANNUAL RETURN FILED WITH THE REGISTRAR OF COMPANIES AND THE EVIDENCE OF THEI R ASSESSMENTS OF THE CREDITORS WERE TOTALLY INCOMPLETE AND IRRELEVAN T; THAT THE ASSESSEE HAD ALSO FILED COPY OF BALANCE SHEETS OF GANGA BUIL DERS LTD. KIRTI ELECTRO SYSTEM P.LTD. S.J. DATAMATICS P.LTD. AND N .E. ELECTRONICS LTD. GIVING EXPLANATION REGARDING THE NATURE OF TRANSACT IONS INVOLVED; THAT THEREFROM IT WAS OBSERVED THAT NONE OF THE DOCUMEN TS REFLECTED AND SUBSTANTIATED THE SUBMISSIONS MADE BY THE ASSESSEE VIDE ITS LETTER DATED 28.11.2008; THAT IN THE DIRECT ENQUIRIES UNDE R SECTION 131 OF THE IT ACT N.E. ELECTRONICS LTD. AND GANGA BUILDERS LT D. HAD REPLIED TO THE SUMMONS AND HAD SUBMITTED COPY OF ACCOUNTS AND PART ICULARS OF SALE OF SHARES TO THE ASSESSEE COMPANY; THAT ALL THE THR EE CONFIRMATIONS WERE GOT VERIFIED FROM THE DETAILS SUBMITTED BY THE ASSESSEE; THAT NONE OF THE INFORMATION RECONCILED WITH THE FACTS S UBMITTED BY THE ASSESSEE DUE TO WHICH THE DETAILS SUBMITTED BY TH E ASSESSEE WERE NOT ACCEPTABLE; THAT A PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE SHOWED AN INCREASE IN THE CURRENT LIABILITIES OF ` 2 05 50 796/- DURING THE YEAR; THAT THIS REMAINED TOTALLY UNVOUCHED; AND THAT THE ASSESSEE REMAINED UNABLE TO ESTABLISH THE IDENTITY OF THE LO AN CREDITORS WHO HAD GIVEN THIS ADDITIONAL FUND TO THE ASSESSEE NOR COU LD EITHER THE CREDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS BE ESTABLISHED. IN THIS MANNER THE SAID ADDITION IN CURRENT LIABILITIES OF ` 2 05 50 796/- WAS TREATED AS UNEXPLAINED CREDIT BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE IT ACT. 3. BY VIRTUE OF THE IMPUGNED ORDER THE LEARNED CIT (A) CONFIRMED THE ADDITION BRINGING THE ASSESSEE IN APPEAL BEFOR E US. ITA-5330/DEL/2011 3 4. CHALLENGING THE IMPUGNED ORDER THE LEARNED COUN SEL FOR THE ASSESSEE HAS CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION WRONGLY MADE BY THE ASSESSI NG OFFICER; THAT THE ASSESSEE HAD DULY FURNISHED COMPLETE EVIDENCE T O ESTABLISH THE IDENTITY OF THE FOUR INDIAN COMPANIES TO WHOM LIABI LITY WAS DUE; THAT THE ASSESSEE HAD ALSO FULLY ESTABLISHED THE CREDITW ORTHINESS OF THESE CREDITORS; THAT THE GENUINENESS OF THE TRANSACTIONS ALSO STOOD SIMPLY ESTABLISHED; THAT AS SUCH THE ONUS OF THE ASSESSEE UNDER SECTION 68 OF THE ACT WAS DULY DISCHARGED BY IT; THAT THE LEARNED CIT(A) FAILED TO CONSIDER THAT NO MATERIAL HAD BEEN BROUGHT ON RECOR D BY THE ASSESSING OFFICER TO DISPROVE OR DISLODGE THE CASE OF THE ASS ESSEE COMPANY AND HAD MADE THE ADDITION MERELY ON THE BASIS OF CONJEC TURES AND SURMISES; THAT THE LEARNED CIT(A) HAS FAILED TO TAK E INTO CONSIDERATION THAT THE INFERENCES DRAWN BY THE ASSESSING OFFICER WERE BASED ON ENTIRELY NON-EXISTENT FACTS; THAT THE LEARNED CIT(A ) WENT WRONG IN IGNORING THE SPECIFIC REPLIES GIVEN BY THE ASSESSEE COMPANY IN ITS REJOINDER DATED 22.7.2010 TO THE REMAND REPORT DATE D 4.6.2010 FILED BY THE ASSESSING OFFICER BEFORE THE LEARNED CIT(A) CON SEQUENT TO THE REMAND PROCEEDINGS; THAT THE LEARNED CIT(A) WENT WR ONG IN OBSERVING THAT THE SUBMISSIONS OF THE ASSESSEE VIS-A-VIS ITS REJOINDER WERE FULL OF FACTS WHICH CONTRADICTED EACH OTHER; THAT THE LEARN ED CIT(A) ERRED IN IGNORING THAT NO FRESH SUM OF MONEY WHATSOEVER HAD BEEN CREDITED DURING THE YEAR AND THE INCREASE IN THE AMOUNT OF C REDITS WERE THROUGH JOURNAL ENTRIES IN A LIABILITY INCURRED BY THE ASSE SSEE COMPANY ON ACCOUNT OF ITS HAVING TAKEN ON AN INDUSTRIAL PROJEC T AND THEREFORE THE PROVISIONS OF SECTION 68 OF THE ACT WERE NOT AT ALL ATTRACTED RENDERING THE ADDITION ENTIRELY UNCALLED FOR. 5. THE LEARNED DR ON THE OTHER HAND HAS STRONGLY RELIED ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT THE ASS ESSEE HAD FURNISHED ADDITIONAL EVIDENCE BEFORE THE LEARNED CI T(A) WHICH WAS REMITTED TO THE FILE OF THE ASSESSING OFFICER BY TH E LEARNED CIT(A). THE ITA-5330/DEL/2011 4 ASSESSING OFFICER SUBMITTED A DETAILED REMAND REPOR T TO WHICH A REJOINDER WAS FILED BY THE ASSESSEE; THAT WHILE PAS SING THE IMPUGNED ORDER THIS REJOINDER OF THE ASSESSEE HAD NOT BEEN CONSIDERED BY THE LEARNED CIT(A) RENDERING THE ORDER PASSED BY HER U NSUSTAINABLE IN THE EYE OF LAW; AND THAT AS SUCH TO MEET THE ENDS OF JUSTICE THE MATTER BE REMITTED TO THE FILE OF THE LEARNED CIT(A) FOR D ECISION AFRESH ON CONSIDERING THE ASSESSEES REJOINDER TO THE ASSESSI NG OFFICERS REMAND REPORT. 6. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. THE LEARNED CIT(A) IT IS SEEN CONFIRMED THE ADDITION OF ` 2 05 50 796/- MADE BY THE ASSESSING OFFICER UNDER S ECTION 68 OF THE IT ACT BY OBSERVING AS FOLLOWS IN THE CONCLUDING P ARAGRAPHS OF THE IMPUGNED ORDER:- 11. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT O RDER OF THE ASSESSING OFFICER WRITTEN SUBMISSION OF THE APPELLANT REMAND REPORT OF THE ASSESSING OFFICER A ND REJOINDER OF THE APPELLANT. THE ADDITIONAL EVIDENCE SUBMITTED BEFORE ME WAS REF ERRED BACK TO THE ASSESSING OFFICER FOR HIS EXAMINATION A ND COMMENTS. COPY OF THE REMAND REPORT RECEIVED FROM THE ASSESSING OFFICER HAS BEEN GIVEN TO THE APPELLANT F OR FILING A REJOINDER WHICH HAS BEEN FILED AND DULY CONSIDERE D. ON A CLOSE STUDY OF THE REMAND REPORT IT REVEALS THAT TH E SUBMISSION OF THE APPELLANT VIS-A-VIS ITS REJOINDER IS FULL OF SUCH FACTS WHICH CONTRADICT EACH OTHER. THE RELEVA NT EXTRACTS OF THE REMAND REPORT QUOTED ABOVE CLEARLY SUBSTANTIATE THIS FINDING OF FACT. IN SUCH CIRCUMS TANCES I CONCLUDE THAT THE ASSESSING OFFICER IS JUSTIFIED IN RECOMMENDING THE ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS.2 05 50 796/- TO BE SUSTA INED. THE APPEAL ON THIS GROUND IS DISMISSED. 7. A PERUSAL OF THE AFOREMENTIONED OBSERVATIONS OF THE LEARNED CIT(A) WHILE CONFIRMING THE ADDITIONS MADE BY THE A SSESSING OFFICER SHOWS THAT THE REJOINDER FILED BY THE ASSESSEE TO T HE REMAND REPORT ITA-5330/DEL/2011 5 FILED BY THE ASSESSING OFFICER HAS NOT BEEN DEALT W ITH IN DETAIL THOUGH IT HAS BEEN OBSERVED THAT THE SAID REJOINDER IS FULL OF F ACTS WHICH CONTRADICT EACH OTHER. AS TO HOW IS IT SO HAS NOT BEEN DETAILED BY THE LEARNED CIT(A). IT IS THE STAND OF THE ASSESSEE BE FORE US THAT IN THE REJOINDER DATED 22.7.2010 (SUPRA) THE ASSESSEE HAD GIVEN SPECIFIC EXPLANATIONS TO THE OBSERVATIONS MADE BY THE ASSESS ING OFFICER IN THE REMAND REPORT. IN THESE FACTS IN THE INTEREST OF JUSTICE WE CONSIDER IT NECESSARY TO REMIT THE MATTER TO THE FILE OF THE LE ARNED CIT(A) TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND TAKING INTO CONSIDE RATION THE REJOINDER DATED 22.7.2010 FILED BY THE ASSESSEE TO THE REMAND REPORT OF THE ASSESSING OFFICER. THE LEARNED CIT(A) SHALL PASS A DETAILED SPEAKING ORDER. WITH THESE OBSERVATIONS THE MATTER IS REMA NDED TO THE LEARNED CIT(A). 8. IN THE RESULT FOR STATISTICAL PURPOSES THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY 2012. SD/- SD/- (G. (G. (G. (G.D.AGRAWAL D.AGRAWAL D.AGRAWAL D.AGRAWAL) )) ) (A.D.JAIN) (A.D.JAIN) (A.D.JAIN) (A.D.JAIN) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 22.02.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR